Haley v. TIAA, No. 21-805 (2d Cir. 2022)
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Plaintiff alleged that a participant loan program that Teachers Insurance and Annuity Association of America (TIAA) offered to her retirement plan is a prohibited transaction under the Employee Retirement Income Security Act of 1974 (ERISA). After ruling that Haley’s suit could proceed against TIAA as a nonfiduciary under ERISA, the district court certified a class of employee benefit plans whose fiduciaries contracted with TIAA to offer loans that were secured by a participant’s retirement savings. TIAA argues that the district court erred when it found that common issues predominated over individual ones without addressing the effect of ERISA’s statutory exemptions on liability classwide and without making any factual findings as to the similarities of the loans.
The Second Circuit vacated the district court’s decision holding that the predominance inquiry of Federal Rule of Civil Procedure 23(b)(3) requires that a district court analyze defenses, and the court did not do so here. Further, because the predominance inquiry of Federal Rule of Civil Procedure 23(b)(3) requires that a district court analyze defenses, and the court did not do so here, the district court did not analyze the exemptions, it also did not engage with the evidence that TIAA submitted to substantiate the purported variations among the plans. A district court cannot simply “take the plaintiff’s word that no material differences exist.”
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